Half of parents support their kids after college

A college degree will help Americans get a leg up on the job market. But financial independence proves more elusive as graduates tap their parents for help with living expenses, new research finds.

Some 50% of recent college graduates say they’re receiving financial help from their family, while an additional 19% say they need financial help from their partner or spouse. This is despite the fact that half of these graduates have full-time jobs, according to the latest installment of an ongoing study, “Arizona Pathways to Life Success for University Students,” carried out by Joyce Serido, an assistant research professor at the University of Arizona, who has been tracking 2,000 people at colleges nationwide since they were freshmen in 2008.

The study underscores the continuing struggle facing college grads at a time of relatively high unemployment and rising student-loan debt.

Of the 1,010 college students surveyed in the latest installment, 89% graduated from University of Arizona or another program, 8% were still enrolled in an undergraduate program and 3% didn’t graduate. Of those who completed their undergraduate degree, 49% had a full-time job, 20% had a part-time job or were self-employed, 9% were in graduate school and working part time, another 9% were in graduate school and not working, 7% were not seeking work while 6% considered themselves unemployed. “Parents of the young adults I surveyed were not as acutely aware of the cost-benefit of college,” Serido says.

Roughly 85% of parents, including those with young children, plan to offer their children monetary aid after college graduation by providing health insurance, assisting with rent or putting up their post-graduates at home, according to another recent study by Upromise, the savings division of Sallie Mae, the student lender. Almost 1 in 3 expect to provide their children with financial assistance for up to six months, and approximately 50% plan to help foot bills for anywhere from six months to more than five years.

These findings suggest graduates are still suffering a hangover from the recession. Half of graduates in the previous five years say their jobs didn’t require a four-year degree and only 20% said their first job was on their career path, a 2012 Rutgers University study, “Chasing the American Dream: Recent College Graduates and the Great Recession,” found. And 1-to-5 years since graduation, most of the students in that survey said they’d made “very little progress” in paying down their student debt.

“The recession never ended for my generation,” says Corie Whalen, 27, spokeswoman for Generation Opportunity, a nonprofit think tank based in Arlington, Va. “Unfortunately, instead of giving us a fair shot, politicians continuously pursue policies that negatively impact us,” she says, citing federal loans that drive up college tuition prices and in turn produce “unsustainable” student debt. (The median outstanding student debt load is around $13,000 for households headed by an adult younger than 40, according to recent data from Pew Research.)

This financial co-dependence has also impacted graduates’ expectations of independence. Almost one-third of graduates expect to receive some support for up to six months, and another third expect to rely on their parents for up to two years, according to Serido’s study; the final third are evenly divided between those who foresee financial support for over two years and those who expect no financial support from their parents. Moreover, some 28% say marriage is not an important life goal, while 19% say the same about home ownership.

The jobs backdrop is still bleak: Employment among 25- to 34-year-olds, the prime age group that traditionally fuels housing demand, hit 75.3% in May, down from 76.0% in February, according to the Bureau of Labor Statistics. “Young-adult employment is less than halfway back to normal,” says Jed Kolko, chief economist at real estate website Trulia. Just 12% of employed 25- to 34-year-olds live with their parents, he adds, versus 20% of 25- to 34-year-olds without jobs.

And student loan debt still weighs on graduates, surpassing both credit card debt and auto loans, according to a 2013 survey by American Consumer Credit Counseling, a nonprofit group that helps people repay debt. Of those respondents aged 25 to 34, 53% said they were forced to move home for at least a period of time after graduation due to looming student loan payments. (They also said student loan debt prevented them from buying a car, buying a home and saving for retirement.)

On the upside, graduates will become more independent as the economy improves, says Mark Kantrowitz, publisher of Edvisors.com, a network of websites about planning and paying for college. “It doesn’t mean that college isn’t worth it. The people who have the jobs are college graduates. If you didn’t get a college degree, you’d be far worse off.” Over the course of an entire career, the average college graduate earns at least $800,000 more than the average high school graduate, according to a Federal Reserve Bank of San Francisco study published last month.

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